Walmart vs. Amazon: Which Marketplace is Right for You?

When it comes to e-commerce giants, Amazon and Walmart are at the forefront, each bringing unique advantages and challenges for sellers.

With Amazon commanding nearly 40% of the U.S. online retail market and Walmart quickly emerging as the second-largest online retailer, deciding between the two can be tough.

Here’s a rundown of how these titans stack up across nine key factors, helping you determine the best fit for your business.

Retail and E-commerce Market Share

Amazon’s Dominance

Amazon is the king of e-commerce, capturing a whopping 37.6% of U.S. online retail spending in 2023. With over half of U.S. households holding an Amazon Prime membership, it’s no wonder Amazon’s net sales reached $554 billion. This makes Amazon a heavyweight in the online retail space.

Walmart’s Rapid Growth

Not far behind, Walmart is gaining traction. Leveraging its extensive brick-and-mortar footprint, Walmart’s online sales grew significantly, securing 6.4% of the market. Their strategy of combining online convenience with physical store support through delivery and pickup services is paying off, particularly in grocery and essential items.

Selling Fees

Amazon’s Fee Structure

Amazon’s selling fees can be a mixed bag. While they offer extensive reach, their fee structure includes monthly subscription fees, referral fees, and additional costs for Fulfillment by Amazon (FBA). This can add up, but the payoff is access to Amazon’s vast customer base.

Walmart’s Leaner Fees

Walmart keeps it simpler. There are no monthly subscription fees, only referral fees, which tend to be lower than Amazon’s. However, Walmart requires UPCs for all products, which can be an added expense for sellers with many SKUs.

Onboarding and Listing

Amazon’s Swift Start

Amazon’s onboarding process is fast and automated. Sellers can quickly set up accounts and list products, but they must stay on top of Amazon’s frequently changing policies and requirements.

Walmart’s Rigorous Vetting

Walmart, on the other hand, has a more stringent onboarding process. New sellers must go through a detailed application, which can take weeks. However, once approved, Walmart offers clearer, more stable policies and dedicated support.

Pricing and Buy Box Competition

Amazon’s Competitive Edge

Amazon’s Buy Box is fiercely competitive. Sellers must optimize pricing and maintain high-performance metrics to win the coveted spot. Tools like automatic repricers can help, but the competition is intense.

Walmart’s Simpler, Yet Stringent Pricing

Walmart has less competition, making it easier to win the Buy Box. However, their pricing policies require sellers to offer the lowest price across all channels, adding complexity for multi-channel sellers.

Shipping and Fulfillment

Amazon’s Extensive Network

Amazon’s FBA program is a game-changer, offering comprehensive fulfillment services. However, it comes with costs and less control over branding.

Walmart’s Control with WFS

Walmart Fulfillment Services (WFS) provides similar benefits to FBA, but sellers retain control over packaging and branding. While Walmart lacks a Prime-like program, their fulfillment services are robust.

Performance Standards

Amazon’s Stringent Metrics

Amazon’s performance metrics are automated and strictly enforced. Sellers must maintain high standards to avoid penalties, which can be challenging but ensure quality.

Walmart’s Key Metrics

Walmart focuses on fewer but crucial metrics, especially on-time delivery and low cancellation rates. Compliance is essential, with direct repercussions for lapses.

Customer Service

Amazon’s Automated Approach

Amazon’s customer service is heavily automated, with strict policies. While efficient, it limits direct seller-buyer interaction.

Walmart’s Direct Engagement

Walmart emphasizes direct engagement, allowing sellers more flexibility in handling customer service, which can build stronger relationships but requires more effort.

Final Thoughts

Choosing between Amazon and Walmart depends on your business goals and resources. Amazon offers immense reach and sales potential but comes with high competition and costs. Walmart provides a more controlled environment with fewer sellers and simpler fee structures but demands rigorous onboarding and compliance.

For a deeper dive into these insights and to decide which marketplace suits your needs best, check out the entire blog on Walmart vs. Amazon. Discover the detailed pros and cons to make an informed decision for your e-commerce strategy.